When hiring contractors for a renovation or development project, the very first step is to decide if we are using a General Contractor (GC)/Project Manager (PM), or if we are “subbing-out” the work ourselves. This decision has less to do with experience level, and more to do with time-availability, the complexity of the project, and our team. Our decision will then determine the types of contracts that we employ for the project.

There are pros and cons to each method, and I have seen people be incredibly successful utilizing both. As a matter of fact, most successful rehabbers and developers use a combination of both methods. We simplified these two options below and gave definitions of each.

• General Contractor / Project Manager - You will have 1-5 contracts (hires) on the project, and you will mainly be communicating with one person who is running the project more closely (The GC or PM). This method is typically used for new Rehabbers who do not have the construction contacts, projects that are larger and more difficult, or rehabbers without much time to focus on the project management.

• Subcontracting “Subbing-out” - You will have many Contracts, one for every trade, and you will be responsible for the hiring, scope, communication, and quality control of each subcontractor. Hopefully this is what the Playbook allows you to do, at the most basic level.

Which one should we choose for our project? There are a lot of factors involved of course, but we can narrow it down to three main things to consider.

1. Time-availability. How much time can you spend on this project? If you are subbing-out the project, then you can expect to be on-site almost every day, and your duties when on-site can also be more extensive than if you hire a GC or PM. If you are busy with other projects, and feel like you can barely keep up with what you have, then maybe it is time to hire a GC. Do not forget to account for driving time. If the project is far away, then you may have to factor in an extra 1-2 hours per visit.

2. Project complexity. This has as much to do with experience and knowledge, as it has to do with steamlining. You might have the team and understanding to carry out a large project, but once you get to a certain level of complexity, you need more levels or management. These extra levels of management can come in the forms of a GC or PM. Conversely, relatively simple projects can be subbed-out easily, and it saves 10-20% by not using a GC/PM. Even builders who almost exclusivly use GC’s will sub-out their small projects.

3. Contractor availability. Unfortunately, this decision can be determined by available talent. There are some areas where finding good contractors, wether GC’s or tradesmen, can seem impossible. We always talk about building your team in The Playbook, and it is more important to find great talent than to fill specific seats. Almost every rehabber and developers systems are built around their available team, and then works backwards.